Thursday, May 28, 2015

AS AUSTIN, TEXAS BUSINESSES ASSESS FLOOD DAMAGE, FEW HAVE FLOOD INSURANCE









MAY 27, 2015

AUSTIN, TEXAS

As Austin-area businesses begin to assess the damage wrought by flooding that followed a weekend of drenching rain, there's a good chance that some of them are up a creek without a paddle, as far as insurance goes.

According to Jim Gavin, director of insurance information for the nonprofit trade association Independent Insurance Agents of Texas, relatively few property owners in Austin have flood insurance.

"There are more than 600,000 flood insurance policies in Texas, and only 5,600 in the city of Austin," said Gavin in an interview. "For everyone without a flood insurance policy, this will be an uninsured event."

That means they'll have to eat the cost of the damage on their own or wait for disaster assistance to help, he noted.

So who needs flood insurance, anyway? According to Gavin, everyone does — especially if you live in an area prone to heavy rain.

"Everyone needs it because of the unpredictability of Texas weather. Any place that can drop 10 to 12 inches of rain in an hour, and you'll need flood insurance," said Gavin. "Realistically, flood insurance is priced so that if you aren't directly in a flood plain, it's fairly reasonable."

Gavin recommends that anyone wanting to learn more about flood insurance to check out the Federal Emergency Management Agency's National Flood Insurance Program, which provides affordable flood insurance policies for property owners.

"They would much rather offer you flood insurance than offer you a low-interest loan after the fact," said Gavin. "It saves them – and you – money."

Federal law requires homes and buildings in flood plains to carry flood insurance, but only if they have a mortgage from a federally regulated or insured lender, according to the website of the National Flood Insurance Program. Those living outside of high-risk flood plains are typically not required to carry it.

And, though it isn't a factor in the damage seen Austin over the weekend, the Texas Windstorm Insurance Association also requires some Gulf Coast residents to buy flood insurance in order to qualify for a TWIA policy.

Source: http://www.bizjournals.com